Did you know that you can claim deduction for the payment made with regards to Stamp Duty and Registration Cost under section 80C? If not! Let me tell you, as per Section 80C of Income tax Act, 1961, one can claim Stamp Duty and Registration Charges of House Property upto Rs. 1,00,000. However, the deduction is available only if such expenses have been incurred in respect of a new house property. Also the amount of such stamp duty or the registration charge for which the deduction is expected by the assessee (tax payer) should be paid in the previous year. Expense of earlier years in this respect shall not be eligible for deduction under section 80c. For example; If you have to claim such expenses during the assessment year 2014-15 for the total income earned during financial year 2013-14, then the expenses incurred during financial year 2013-14 are only allowed, but not before.
Further Section 80C(2)(xviii)(d) of the Income-tax Act, deduction of stamp duty, registration fee and other expenses for the purpose of transfer of house property is allowed only if the same is for the purpose of purchase or construction of a residential house.
There is something to be noted:
Stamp duty charges and registration charges paid while purchasing a new house are eligible for tax deduction under Section 80C. Now, what is the meaning of new house is; you are purchasing for the first time and no one stayed in that house previously. That means it is not a resold property.
Also the assessee himself must pay such amount to claim deduction under section 80C and the house property should be in his/her name. Deductions shall not be available to any other member within in the same family making the payment on behalf of the assessee.
Must know conditions to claim deduction:
- Amount must have been paid by the assessee.
- The deduction can be claimed only in the year when payment is made.
- The claim is entitled only after possession of the property.
- The house should be in the name of the assessee claiming deduction.
- The deduction is available upto the limit of Rs. 1,00,000 u/s 80C.
- This deduction is available only for the purchase of new residential house property and not commercial property.